DTN Before The Bell Grains

Morning CME Globex Update:

The U.S. dollar is lower Tuesday morning, but only slightly, allowing wheat futures to attempt some small gains. Corn and soybean futures have stayed inside tight overnight trading ranges, but futures trade is expected to be quite active across a variety of markets prior to the midterm election results.

Other Markets:

Dow Jones:	Lower
U.S. Dollar Index:	Lower
Gold:	Higher
Crude Oil:	Higher

Corn:

Nationwide, corn harvest has rounded past the three-quarter mark in the latest Crop Progress report, but Iowa, Nebraska and Kansas remain behind the average pace after a challenging season of rain delays; and now there's snow in the forecast for later this week. Corn futures prices, however, seem to have found a comfortable price range to trade inside no matter what the harvest progress looks like. February live cattle futures suffered a huge loss of up to $2.42 per hundredweight during Monday's trading session, and it may have been sparked by traders reassessing the U.S. economy and consumer discretionary purchases, like beef, during the last two months of this trade-war stifled year. The long-term prospects for corn demand, too, depend on a strong consumer economy. The DTN National Corn Index was $3.37 per bushel Monday, showing national average basis stronger at 37 cents under the December futures contract.

Soybeans:

The outside markets will be the first to register investors' reactions to exit polling during Tuesday's midterm elections, but soybeans won't be far behind. The U.S. dollar index dipped lower Tuesday morning, allowing soybean and wheat futures to attempt small gains off and on. The January soybean futures contract currently trades about 60 cents above its low from mid-September and is unlikely to aim in that direction while there remains hope about opening renegotiations in the U.S.-China trade war on the sidelines of the G-20 summit at the end of November. Also, nationwide soybean harvest progress remains behind pace (83% complete on Sunday compared to a five-year average of 89% at this time of year), and that should be considered bullish, as the wet harvest delays may be driving down the quality and harvestable yields of mature soybeans still standing in fields. There were 251 issues and stops of expiring November futures contracts. The DTN National Soybean Index was $7.85 per bushel Monday, showing national average basis stronger at $1.01 under the January futures contract.

Wheat:

International wheat prices, including U.S. wheat prices, have been drifting lower in recent weeks, with the exception of wheat in Australia where production estimates continue to fall. Winter wheat harvest has begun in drought-ravaged eastern Australia, and some elevators in the region aren't even expecting to receive any wheat. There is even the possibility of Australia importing grain from the U.S. and Canada. Meanwhile, in the U.S., winter wheat seeding has gone from proceeding faster than usual at the start of October, to now being 6 percentage points behind the average pace as of Nov. 4 (84% instead of 90%). Showers remain in the forecast for the Southern Plains, which will be favorable for the prewinter development of the newly-planted crop. DTN's collected SRW Index on Monday was $4.75 per bushel (32 cents under the December Chicago futures contract); the HRW Index was $4.72 (33 cents under the December KC futures contract); and the Spring Wheat Index was $5.35 per bushel (47 cents under the December Minneapolis futures contract).

Elaine Kub can be reached at elaine@masteringthegrainmarkets.com

FollowElaine on Twitter @elainekub

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